Caterpillar stock recovers magnificently after getting slammed for Q3 results


  • CAT stock sinks more than 5% before recovering completely.
  • Caterpillar earned $5.17 per share in Q3 on revenue of $16.1 billion.
  • A downturn in equipent sales to end users pushed sales lower YoY.
  • Q4 outlook now looks less rosy as management sees construction weakness.

Caterpillar (CAT) stock is turning that frown upside down as they say. The construction and mining equipment manufacturer has risen from an initial Wednesday morning sell-off of 5.2% to a slight gain just before lunchtime in New York.

The market has largely excelled in the midweek session after earnings from Alphabet (GOOGL) late Tuesday sent the buy orders into overdrive. The Dow Jones Industrial Average (DJIA) has risen 0.5%, nearly double the S&P 500 and NASDAQ at the time of writing.

Third-quarter US GDP undershot the 3.0% expected figure on Wednesday, coming in at 2.8%. The ADP Employment Change report for October printed sharply above consensus however.

Caterpillar stock news

Caterpillar underperformed the Wall Street consensus in the third quarter. The Irvine, Texas based company had adjusted earnings of $5.17 in the quarter, 3.5% below the $5.35 that Wall Street expected.

Revenue of $16.1 billion was $140 million below consensus and fell more than 4% from a year ago.

Management also startled shareholders by admitting weakness in their Q4 outlook. The full-year sales outlook is now likely to arrive below earlier C-suite forecasts, and management attributed this to construction industry weakness.

Caterpillar stock chart

The primary point to notice is that CAT stock reached support at $362 and immediately bounced off it. That $362 to $369 support region has been significant since acting as resistance in March, April, May and June of this year. Since CAT broke below but then climbed back above the 50-day Simple Moving Average (SMA) in Wednesday's session, it would seem that the market has already discounted the Q4 worries.

For such a bad earnings report, the CAT stock price seems safe. The recovery was so impressive that CAT is unlikely to lose its $362 footing in the coming sessions. Though the Relative Strength Index (RSI) has been descending of late, expect CAT to begin to consolidate here.

CAT daily stock chart

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD holds above 1.0850 after EU inflation data

EUR/USD holds above 1.0850 after EU inflation data

EUR/USD trades marginally higher on the day above 1.0850 in the European session on Thursday. The data from the Eurozone showed that the annual HICP inflation rose to 2% in October from 1.7% in September, helping the Euro hold its ground.

EUR/USD News
USD/JPY falls below 152.50 as markets assess BoJ policy decisions

USD/JPY falls below 152.50 as markets assess BoJ policy decisions

USD/JPY stays under bearish pressure and trades below 152.50 on Thursday. The Bank of Japan (BoJ) left its policy setting unchanged but Governor Ueda noted that the impact of foreign exchange rate on prices had become larger than in the past.

USD/JPY News
Gold holds near $2,780, looks to US PCE Price Index for fresh impetus

Gold holds near $2,780, looks to US PCE Price Index for fresh impetus

Gold stays in a consolidation phase after setting a new record-high of $2,790. US political jitters and Middle East tensions might continue to act as a tailwind for the XAU/USD. Traders keenly await the release of the US PCE Price Index before placing fresh directional bets.

Gold News
Uniswap Price Forecast: Technical outlook suggests a bullish breakout ahead

Uniswap Price Forecast: Technical outlook suggests a bullish breakout ahead

Uniswap is trading slightly below $8 on Thursday after rejecting a key resistance level on Wednesday. A successful close above this threshold could indicate a rally for the decentralized exchange, bolstered by technical indicators showing a bullish crossover pointing to potential upward momentum.

Read more
German economy surprises in the third quarter

German economy surprises in the third quarter

The German economy avoided a technical recession in the third quarter, showing unexpected growth. However, this does not change the fact that the economy remains stuck in stagnation.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures